The tax changes were made to ensure contactors paid the correct tax if the work they did for a firm was equal to employment.
Virgin Money and Clydesdale will lend to contractors who fall inside of IR35 rules, where they are paid via an umbrella company or payroll service company.
If a contractor is paid by an umbrella company they must show the last two months of payslips, which takes into account gross pay after the deduction of statutory employer costs and payroll service costs.
The lenders said “complex contractor situations” would be assessed manually by an underwriter and considered on a “case by case basis”.
Virgin Money’s head of customer acquisition, Sarah Green, said: “As a bank we understand that contractors need mortgage products that are flexible enough to accommodate their professional and financial situations and that is why, following the IR35 changes we have made these positive amendments to our lending policy.”
Virgin Money and Clydesdale Bank are the latest lenders to make changes to its contractor offering, with Halifax adjusting its affordability and income criteria for contractors in June.